Is it possible to return a vehicle before the end of the lease? Of course! That is why you have to learn to negotiate with your dealer and, it can be actually for the benefit of both: you and the dealership. Early termination isn't a problem if you do it at the right time. Let's talk a little bit about it in the following article: "Returning the Car Before the End of the Lease."
In Theory, You Shouldn't
As it is the primary reason for the contract. You need a vehicle for a specific period and you "rented" one under a specific regular payment agreement. That is the primary purpose of the lease contract. Anything else is treated as an "early termination," which will result in affecting the part with interest in doing so.
This is where the loophole (if we can call it this way) can work for both cases. For explaining so, let's take the following example:
You leased a vehicle for 48 months, and it was entirely covered up to the full lease term by the manufacturer's warranty. The monthly payment of the vehicle is 500CAD/month, and you have still four months to pay, meaning you will still have to pay 2,000CAD until the end. From this scenario, AND assuming you are interested in changing your car right now, we can project the following outcomes:
- You are expecting to replace your vehicle on a good deal you found right now. You can return your car and pay the remaining 2,000CAD to terminate the lease.
- Your dealer is interested in keeping you as a customer and offers you a "No fee" return if you sign a new car with them. In this case, you would be "saving" 2,000CAD while signing a new lease.
- You can go to another dealer and negotiate acquiring a new vehicle with them if they pay the amount due on your current lease.
In either case, being close to the end of the lease is crucial for having multiple outcomes. The longer the time to end the contract, the harder will be, obviously, to have an actual opportunity.
Why Would a Dealer Take It Earlier?
There are multiple reasons, but mainly, while the vehicle is still under warranty, it is better for the dealership. As people who lease cars do not own these, the primary interest in having the vehicle (mechanically) in good shape, is on the dealership.
Leased vehicles will be sold again later as used vehicles, but the fact of returning it earlier, has a few pros for the dealership:
- Mileage Saved: A few months less is good for both the lessor and the dealership when it comes to mileage. Maybe the car was either low or will roll more than estimated. In either case, the fewer kilometers, higher the value of the vehicle.
- Warranty Period: The dealership can do a complete vehicle review and certification (that will have to do anyway) before posting it available in the inventory. Any mechanical problem that is the responsibility of the manufacturer can be fixed now.
- Keeping the Customer: This is key for the dealership, specifically. Plus having those previously mentioned benefits, having a loyal customer is more precious than any other thing for a business.
39, 42 & 66 Months Lease?
Have you seen those? Three years and three months lease? Yes, those work too. Not available to all manufacturers, but an outstanding business opportunity for dealerships and for establishing customer loyalty. These are the kind of leases that will likely become an "early termination" by 3 - 6 months before the actual end of the lease contract.
If you are next to the end of your lease, just feel free to ask your dealer. Give them a call, and evaluate your possible outcomes.
